Doom: “With the turmoil threatening to spiral into financial meltdown as the value of banks' sovereign bond holdings slide, Merkel and Sarkozy are likely to discuss in Berlin both how to manage Greece, prevent contagion and strengthen lenders.”
Gloom: “German Chancellor Angela Merkel will meet French President Nicolas Sarkozy amid signs that some European banks are feeling the strain of the lingering debt crisis which has pushed Greece to the brink of bankruptcy.”
Doom: “Lots of beer and self-congratulation set the tone at the conference, with CSU leaders praising Bavaria, one of Germany's most affluent states, for its exemplary hard work and thrift. The party also adopted a new policy directive urging countries that cannot stick to euro zone rules to leave the single currency — a view clashing with that of Merkel who wants to keep the euro zone intact.”
Doom: “World Bank chief Robert Zoellick, for one, told German business weekly Wirtschaftswoche that Berlin had shown a' total lack' of leadership. 'The longer it lasts, the more money it will cost and the fewer options for action there will be,' he said in an interview to be published Monday.”
Gloom: “The backdrop to these summits is the ongoing attempts to agree to a break-up of the Franco-Belgian bank, Dexia. Internationally, it might not be the best-known French bank (when compared with the likes of BNP Paribas and Societe Generale) but its importance in the economic infrastructure of both countries should not be under-estimated and it
is likely to become the first failed bank in the recent crisis.”
Doom & Gloom: “German Chancellor Angela Merkel and French President Nicolas Sarkozy will talk about a Greek bankruptcy, the country’s future in the euro area and contagion risks, Le Journal du Dimanche said, citing an unidentified person in Sarkozy’s office. Sarkozy wants to save Greece and strengthen aid mechanisms for troubled European nations, the newspaper said. A Greek default would sink some banks and send the euro area back into recession, while Greece’s exit from the euro would deter investors from Europe, leading to the same results, according to Le Journal du Dimanche.”
Gloom: “Today, the world is threatened with a repeat of the 2008 financial meltdown – but on an even more cataclysmic scale. This time, the epicentre is in Europe, rather than the United States. And this time, the financial mechanisms involved are not highly complex structured financial products, but one of the oldest financial instruments in the world: government bonds… At the end of the day, a collective, burden-sharing Europe is the only way out of the current crisis. But that requires substantially greater centralisation of political accountability and control than Europeans seem able to achieve today. And that is why many of them could be paying much more for credit tomorrow.”
And so on: “But for non-eurozone members of the G20, including China, the US and the UK, this week's gathering is likely to be just as frustrating as their sojourn in Washington, when they repeatedly urged their eurozone counterparts to get a grip on the spiralling crisis, and were greeted with disdain or outright hostility.”
